Limit Order and Other Order Types You'll See at Most Brokerages

Jun 2017
Limit Order and Other Order Types You'll See at Most Brokerages

There a number of different order types that you can choose from on your online trading platform. Four of the most popular ones are explained below.

Limit Order and Other Order Types
Limit order

Limit order allows you to specify a limit price at which you want to buy or sell a given asset. Your order will only be executed once the price has reached or exceeded your pre-set limit. Limit order is the other side of stop loss. You don’t have anything when you set a limit order, but you know at what price point you want to buy a certain thing.

For example: You want to buy Apple stock on the price of $100, but the price of It is $110. You set a limit buy order at 100, once the price decreases to a 100 or below, the system will buy for you.

Two types: 

  • Limit order to Buy = at or below the specified price
  • Limit order to Sell = at or above the specified price

How long does a limit order last?

It’s up to you. There are multiple ways you can set it up. Brokers usually use one of the following options:

  • 1 day
  • GTD - Good Till Day
  • GTC: Good Till Cancel or Custom - this is usually a given date

Does limit order cost money?

It won't cost you money. This is a basic functionality of all brokers, it is essentially one of the reasons they exist: to allow you to set such orders.

How do you set it up?

Go to the trading platform, look for the order execution interface. You can set up limit order when you purchase the product, just like the stop loss order. This is almost all of the cases price, not a percentage.

Limit Order and Other Order Types
Market order

A market order is the default option you can select, it is the most basic order type. It is recommended to choose this when you want your order to be filled immediately. Your trade will be executed at the current best price.

Limit Order and Other Order Types
Stop (loss) order

Stop orders work the opposite way as limit orders, and they are designed to help you minimise your losses. Unless otherwise specified, a stop order is a trigger for a market order. E.g. if you set a sell stop order at 100, once the price decreases to a 100 or below, the system will sell for you.

  • Stop order to Buy = at or above the specified price
  • Stop order to Sell = at or below the specified price

Learn more about about this order type from our how to manage stop loss order article.

Limit Order and Other Order Types
Stop limit order

A stop (loss) order as specified previously, with the added feature of triggering a limit order once the stop price is reached. E.g. if you set the sell stop at 100 and the limit order to sell at 90, then once the price decreases to a 100 or below, the system will sell for you, but it will stop selling once the price reaches 90.

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